It's December 31 - that can only mean one thing
The last day of the year is the end of the fiscal year for many companies - they say, "if the calendar ends on December 31, then our financial records will 'end' for the year on December 31 as well."
Not everyone picks this date. Among many good reasons, since many companies have December 31 year-ends, that means that there's a higher than average concentration of companies closing their books at the same time. This is why the concept of "busy season" exists - accounting firms have to deal with a majority of their clients all needing an audit at the same time.
We can discuss the chaos this creates later - anyone working in an audit firm will become completely unavailable to you if they're working on financial statement audits for the next few months - but we'll talk more about the effect of the year end process itself today.
If you've never been involved in running a business and don't think of it as more than "charge lots of money, and get rich doing it", then it may not sound like a big deal to you, but it is.
When you say, "we made $34 billion in fiscal 2007", that usually means that at the end of 2007 - December 31 if that's your year-end - you had your big fancy computer system say "that's it, we're done!", and then you pieced everything together to make sure the computer got the numbers right. The accounting and finance people call it "closing the period" or other similar terms.
You need to stop counting all your sales the moment the clock hits midnight. If you're a company with 24-hour stores across the country you need to check the accounting rules to see if you're supposed to say "midnight in Halifax" or "midnight for every single time zone across the country" to see whether you're allowed to choose a method, or if you should follow a single universal point in time to stop counting sales globally. To make things more fun, you then need to make sure that your accounting software obeys your wishes too.
You can see how this can accounting get horribly complicated in a hurry. Some may choose to close up shop early on the last day of the fiscal year to avoid those problems. Others don't have that luxury.
And once you're talking "complicated" and mixing it in with "accounting" in the same sentence, surely the next thing you'll likely expect to hear about is "auditors".
Auditors, it being their job, are keenly interested in making sure that you deal with December 31 properly. There's a concept called "cutoff" which I alluded to above and is pretty self-explanatory: you want to check to see whether the company that's being audited actually followed all the complicated rules that are in place to make sure that "cutoff" and all the other rules, procedures and processes that occur at the end of the year were performed properly.
Sometimes the auditor can come in a few weeks later, review the paperwork, and say, "yes, this shows that you did it properly." Or, "oops, you have a mistake here. Let's see if you made more mistakes that will impact your financial statements."
And as good as an after-the-fact review is, sometimes you have to do tests during the year. In addition to making life a little more exciting - we have to finish this test before midnight - it also means that you have to finish the test before midnight!
In the case of, say inventory or stock counts, auditors frequently need to be present, and the counts need to take place before the end of the year.
So dedicate a moment of time today to think about those poor young auditors who find themselves tramping about in safety boots, dress shirts and parkas through a warehouse - or, God forbid, frigid open field - to confirm that the Audit Client did in fact count $850 million worth of gear on hand. Not the best way to spend the last day of the year - but hopefully the work gets done before the end of the day.
Few people complain about liquor store audits though.